The Cost of Building the New iPhone 5S and 5C

News
By Jane McEntegart
published

Apple's iPhone 5S and 5C face the teardown treatment for a second time.

When Apple first announced the iPhone 5C a few weeks ago, there was a lot of shock at the price. Sure, the on-contract pricing isn't bad, but the up-front cost of the phone isn't exactly economical at $549. Especially for a phone that everyone thought would be a budget or entry-level iPhone. Yes, it seems the 'C' in 5C most certainly stands for 'color' and not 'cheap,' but how much does it cost Apple to build an iPhone 5C? Or the iPhone 5S (which starts at $649) for that matter?

 

According to a teardown analysis from IHS and obtained by AllThingsD, the cost of components and manufacturing for the iPhone 5C is from $173 to $183, depending on capacity and including $7 for assembly. The iPhone 5S costs at least $199 (for the 16 GB model) for components and assembly. What's more, IHS says that aside from the fingerprint sensor, A7 processor and new memory chips in the iPhone 5S, they're essentially the same phone. Of course, this is just the cost for components and assembly, and Apple has to factor other costs into the production of the iPhone, including shipping and marketing.

 

Apple released the iPhone 5S and 5C last Friday following a September 10 unveiling. The company on Monday revealed that it had sold nine million iPhones over the weekend, though the company didn't offer any sort of breakdown of which phone sold more.

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Jane McEntegart
21 Comments Comment from the forums
  • sketysh
    Interesting. Now make a similar article for some Android phones.
    Reply
  • andystanley
    Hmmmm.....Are they making any money from these phones? Seems like awfully slim profit margins ;)
    Reply
  • Blazer1985
    Not exact. People let Apple do this.
    SHUT UP AND TAKE MY MONEY! :-)
    Reply
  • falcompsx
    Why wouldn't Apple do what they are doing? they make massive profits, and sell in massive quantities. As long as people keep buying it, they will keep doing it. Apple isn't doing anyone any favors, nor should they, its simple business. If the majority of people didnt like how much margin Apple charges, and didnt buy the phones, the would be forced to either lower prices, or add enough features to make it worth the cost.
    Reply
  • Shankovich
    How about all the R&D that went into it, paying all the engineers, programmers, etc. Every phone is overpriced, but don't forget how expensive it is to pay the designers and analysts at every level.
    Reply
  • none12345
    Speaking from the standpoint of a small business owner. On an item that sells for $500, my cost will be somewhere between $410 and $440, meaning profit of 60-90, before overhead, rent, employees, power, etc, etc.

    Having a profit margin of $450 on an item that sells for $650 would be absolutely godly. But, id feel pretty dirty making that kinda profit margin on items in that price range.
    Reply
  • Cons29
    ok, let us factor in R&D, other overhead cost, which is valid.

    i do have one question though, if a higher storage cost like a freakin $10, then why sell it for an additional $100??? that's why i like android more, most have expansion slots, you're not forced to buy the higher capacity, not to mention you can use external drives/flash drives
    Reply
  • tomfreak
    this is the reason why I only buy low cost budget phone that is below $300.

    I think I now gonna go $200 budget for my next phone. Smartphone can be obtain for $150 already. So $200 budget seems right
    Reply
  • hasten
    I'm confused. The Apple fanboys keep throwing around R&D, but when you release the exact same product in a less expensive housing the R&D costs are nearly $0. Unless of course you believe the "Plastic Perfected" marketing (in which case you are a fool) - on that note you can add in the astronomical amount of marketing expense to keep the distortion field active.
    Reply
  • abbadon_34
    Don't confuse the 2-years CONTRACT price (~$200) with the NO CONTRACT price (~$600).
    Reply